Money or Grit? Determinants of MisMatch / Russell Cooper.

By:

Cooper, Russell

Contributor(s):

National Bureau of Economic Research

Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w22734.Publication details: Cambridge, Mass. National Bureau of Economic Research 2016.Description: 1 online resource: illustrations (black and white)Subject(s):

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Abstract: This paper studies the determinants of mismatch in educational attainment. Mismatch arises when high ability individuals do not obtain a college degree and/or low ability individuals do. Using data from the NLSY97 survey, the paper estimates a structural model of education choice that matches the moments of mismatch, college attainment and labor market outcomes. The analysis conditions on gender, race and socio-economic status. Ignoring the role of parents, mismatch is explained by differences in tastes for education and the presence of occasionally binding borrowing constraints. But parents matter. This channel operates through both the attitudes and ability of offspring. Once these links between parents and children are taken into account, the influence of borrowing constraints disappears. Mismatch reflects variations in tastes as well as noise in test scores, the underlying measure of ability. The paper also presents a decomposition of the college wage premium into the returns to schooling and the selection into higher education. The analysis highlights the power of selection into higher education as an explanation of the college wage premium by gender, race and socio-economic status.

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Holdings
Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w22734 (Browse shelf(Opens below))	Not For Loan

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October 2016.

This paper studies the determinants of mismatch in educational attainment. Mismatch arises when high ability individuals do not obtain a college degree and/or low ability individuals do. Using data from the NLSY97 survey, the paper estimates a structural model of education choice that matches the moments of mismatch, college attainment and labor market outcomes. The analysis conditions on gender, race and socio-economic status. Ignoring the role of parents, mismatch is explained by differences in tastes for education and the presence of occasionally binding borrowing constraints. But parents matter. This channel operates through both the attitudes and ability of offspring. Once these links between parents and children are taken into account, the influence of borrowing constraints disappears. Mismatch reflects variations in tastes as well as noise in test scores, the underlying measure of ability. The paper also presents a decomposition of the college wage premium into the returns to schooling and the selection into higher education. The analysis highlights the power of selection into higher education as an explanation of the college wage premium by gender, race and socio-economic status.